Govt. more than doubles outlay on PLI for IT hardware to ₹17,000 crore

Announcement comes on the back of 17% CAGR in IT manufacturing, says Vaishnaw

Updated - May 17, 2023 09:20 pm IST

Published - May 17, 2023 07:40 pm IST - NEW DELHI

The Union Cabinet on Wednesday approved an updated Production Linked Incentive (PLI) scheme for IT hardware manufacturing, with the total budgetary outlay increased to ₹17,000 crore, Minister of Electronics and Information Technology Ashwini Vaishnaw announced. 

“Electronics manufacturing in India has witnessed consistent growth with 17% CAGR in [the] last 8 years,” the government said in a statement. “This year it crossed a major benchmark in production – $105 billion.” India crossed $11 billion in mobile phone exports, and was now the second-largest mobile handset manufacturer, trailing only China, the government said.

The PLI scheme for IT hardware was first notified in March 2021. The scheme provides upwards of 4% in incentives for incremental investment in domestic manufacturing for eligible firms, which include companies like Dell and Flextronics.

“Based on industry feedback on improving the previous version of the scheme, the Cabinet has approved the changes,” Mr. Vaishnaw said. For instance, he said, the incentive was now increased to 5%. An “additional optional incentive” had also been introduced for using domestically produced components. While Mr. Vaishnaw didn’t specify the rates of these optional incentives, he said that if they were availed as “envisioned,” the total incentive would amount to 8–9%.

Telecom hardware manufacturing had exceeded the projected ₹900 crore and reached ₹1,600 crore. “Two of those companies have become very important exporters in the world for complex radio equipment,” the Minister added. The budgetary outlay of the scheme would now be ₹17,000 crore, with a tenure of six years.

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